Ladies and gentlemen, thank you for standing by, and welcome to today's Dassault Systèmes 2021 Q3 Earnings Investor Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. I must advise you that this conference is being recorded today, and I would now like to hand the conference over to your first speaker, François Bordonado. Please go ahead, sir.
Thank you, Valerie. Thank you for joining us on our third quarter 2021 earnings conference call with Bernard Charlès, Vice Chairman and CEO, and Pascal Daloz, Chief Operating Officer and CFO. May I remind you that Dassault Systèmes results are prepared in accordance with IFRS, that most of the financial figures discussed on this conference call are on a non-IFRS basis, with revenue growth rates in constant currencies unless otherwise noted. That some of our comments on this call contain forward-looking statements that could differ materially from any actual results. Please refer to today's press release and the risk factor section of our 2021 Universal Registration Document. All earnings materials are available on our website, and these prepared remarks will be available shortly after this call. I would now like to introduce Bernard Charlès.
Good morning and good afternoon. It's a pleasure to be with you all, today. As you may notice, we are pleased with our third quarter results. Our team executed well, leveraging continued positive business momentum across geographies and industries. Earnings per share rose 40% in constant currency, thanks to robust revenue growth and high profitability. Total revenue increased 12% organically with licenses and other revenue up 24%, well above our guidance. This is reflecting double-digit growth in our core industrial markets and life sciences. We also benefited from continued acceleration of 3DEXPERIENCE on cloud adoption. Year to date, 3DEXPERIENCE software revenue grew 18% with licenses and other revenue up 36%, and cloud revenue increased 24%. We raised our full year guidance, capturing the incremental earnings upside from the third quarter.
Pascal will discuss our financial performance in more detail. Now I'd like to share some perspective on our strategy on progress in the business environment. Each quarter, we connect our achievement to our purpose, harmonize product nature and life. Our strategic ambition is to become the world's number 1 partner for reinventing a sustainable economy. Virtual technology was indeed born for sustainability. It was first used in industry for virtual prototyping, in some way for doing things right first time while saving materials and resources, capitalizing knowledge as well as know-how on improving environmental handprints. The greatest power of the virtual world lies in unleashing imagination, in enabling people to imagine differently on growing, therefore, our handprint. Sustainability is all about life cycle. We invented product life cycle management. It's about connecting the dots.
Offering a multiscale, multidiscipline, holistic, and inclusive approach to innovation is what we do with virtual platform, providing an inspiration for new sustainable offerings. The 3DEXPERIENCE platform on science-based virtual twin experience are unparalleled catalyst to rationalize our eco bill, to harmonize product nature and life, and ultimately reinvent a more sustainable economy. If we experience a virtual twin, we can harmonize this. This is a very core of Dassault Systèmes. Let's illustrate the use of 3DEXPERIENCE cloud in manufacturing sector. You have noticed maybe today that we refer to Renault adoption of our platform on embracing the move to sustainable mobility with the announcement of their transformation called Renaulution. It's really a profound strategy on a business model transformation.
It will shift from a car company working with tech to a tech company working with cars, adding revenue streams from services, data on energy, and becoming a leader in the energy transition. Renault has therefore chosen to partner with Dassault Systèmes for this important initiative. The company will employ 3DEXPERIENCE on the cloud to drive the Renaulution virtual twins. Virtualization of both its consumer experiences as well as the enterprise, connecting all stakeholders in its value network to enable inclusive innovation. In the context of the circular economy, this will ensure the group's sustainable profitability and maintains its path to achieve its zero CO2 footprint commitment in Europe by 2040. By doing so, Renault is positioning itself to thrive in the new economy. The world has shifted from a product economy to an experience economy, one that values the usage over the product.
The experience economy is not just about user experience. It's about the overall balance and impact of any service we provide to society. This means seeing industry as a value creation process for people, whether you are a citizen, a consumer, or a patient. With this in mind, we are pleased to announce a partnership with Bloom to bring social data intelligence, data on the human experience across industries to our clients. They need it to better improve their solution. Bloom is the first artificial intelligence company dedicated to qualitative, predictive, and strategic analytics of social networks. The Dassault Systèmes will incorporate Bloom's proprietary social inference technology and real-world evidence into our 3DEXPERIENCE platform to afford clients an understanding of consumers, patients, and citizen experiences, and the ability to anticipate major technological and sociological trends.
Our 3DEXPERIENCE platform connects people's lives in all dimensions, and Bloom's strategic social insight will enable human-centric experience, truly game-changer for our clients. We look forward to working with our new partners at Bloom. Turning now to life sciences. As you know, we are already a global leader. Life sciences is transforming rapidly, putting the patient at the center of the approach with precision medicine, regenerative therapeutics, decentralized clinical trial, and synthetic control arms. Our technologies are unmatched in accelerating these key trends which improve patient outcomes. Early this month, our Medidata NEXT conference drew a record number of participants. We shared significant technological advances with our Medidata Rave platform that have the ability to create multidimensional views of the patient, incorporating data from sensors, wearables, electronic medical records, and other sources.
This represents the next step in the evolution of how clinical trial data is captured and monitored. We continue to deliver game-changing innovation in the sector. During NEXT 2021, we featured a number of successful partnerships, including Amgen, Boston Scientific, Labcorp, Moderna, and Medacina. We encourage you to visit our website to hear their amazing stories. Now, let's turn our attention to some of the life science partnership we have established during this third quarter. Rho is a privately held contract research organization, we call them CROs, with 30-year track record as a trusted partner to leading drug development companies. Rho has selected Medidata's decentralized clinical trial technology to attract and win more sponsor bids, reduce study build time and cost, and streamline real-time visibility into patient data and quality.
The promise of decentralized clinical trial to deliver better patient experience, democratize access, and accelerate drug development have established them as the new standard in research. Medidata is changing the game as the first company to offer decentralizing capabilities for both patient participation and study quality. Another example in medical device, we are working with a company enabling patient-centric approach. MGI Tech is a China-based leading manufacturer of genome sequencing instruments and other products supporting precision medicine. MGI has chosen to leverage our License to Cure for Medical Device solutions on our 3DEXPERIENCE platform. This is an end-to-end solution to integrate a full framework and optimize quality, regulatory requirement, and patient experience, therefore reducing cost and time to market.
By progressing from things to life as a core part of our strategy and mission to really realize the harmonization we aim at doing, we believe we are entering truly in an industry renaissance for life science. Together, we have significant opportunity to impact patients and drive meaningful change for healthcare. Coming back to the manufacturing industry, we need to think beyond optimization to usages and reconsider the portfolio of product and services, including raw materials, as well as engineering in context of waste reduction on circular economy. Therefore, new design is essential, and we believe this will transform the entire industry. A few example related to optimization of logistic planning and scheduling. BMW, a long time partner of Dassault Systèmes, is taking an holistic view of sustainability.
Recently at the IAA Mobility in Munich, BMW focused on the circular economy with its rethink, reduce, reuse, recycle approach. The company announced its goal to rapidly put in place the most sustainable supply chain in the whole of the automotive industry. To achieve this, BMW is using our DELMIA Quintiq virtual environment. It synchronizes demand from vehicle plants for components and increases productivity while reducing inventory and cost. This enables BMW to address materials procurement, supply chains, and social responsibility to benefit the global community as a whole, as well as its employees. Another example is Hexcel, a global leader in advanced composite technology that supports customers in the commercial aerospace, space, and defense, and industrial markets to make products using lighter yet stronger materials. Lighter means less fuel is required, resulting in less impact on the global environment.
The company's products also reduce noise pollution and help produce clean and renewable energy. Hexcel has also selected DELMIA Quintiq technology to build a platform for sales and operation planning and master production scheduling to support its effort to deliver advanced sustainable materials. In infrastructure and city, we are disrupting the market. Airbus has been a valued partner for over 20 years. We are very pleased to announce a truly game-changing endeavor that will help solve global challenges and improve life on Earth. Using its own space imagery, Airbus will employ Dassault Systèmes Virtual Twin experience powered by our 3DEXPERIENCE platform to create a virtual twin of the Earth. Airbus plans to use 3DEXPERIENCE to provide space imagery in the context of the Space Data Marketplace, a project funded by a consortium including Dassault Systèmes.
Creating a Virtual Twin of the Earth will benefit the space economy as it seeks to grow with sustainability at the forefront, including manufacturing in space. It will also have positive sustainability use cases across other sectors and industries, including fighting, of course, deforestation, land use and planning, security, securing the food supply, and measuring climate impact. We look forward to hearing more from Airbus about this exciting initiative in the future, of course. In the new space era, companies are revolutionizing the market with sustainable experience such as reusable launchers, expanded lifespan satellites and even life on other planets, and a lot of them are already great customers. Our technology are changing and opening new possibilities from that perspective. A good example is in Interstellar Lab.
This Franco-American company building BioPods that support sustainable living on Earth and in space by generating and recycling food, water, and air. Interstellar Lab is leveraging our solution, Reinvent the Sky, on our 3DEXPERIENCE platform, which is used with the virtual twins to simulate, test, and optimize the performance of its BioPods domes on the biological systems. We are at the cusp of new era in global space with a $450 billion economy with significant implication for citizen and consumers. We look forward to enabling disruptive companies with virtual twin experiences and critical technology to enable and accelerate concept to certification. For additional proof points on the imperative for sustainability, a recent Financial Times survey involving 300 executives found that 36% of executives are considering how to start integrating sustainability into product development.
Technology departments have made sustainable innovation a priority in 68% of the cases. In our earnings presentation, we feature several examples of how our clients, including Bouygues, Jacobs, Deutsche Lichtmiete , Metsä Board, and Torres, are using our technology to walk the talk when it comes to sustainability. In summary, the studies I've shared with you today demonstrate the many ways in which our clients are reimagining all aspects of business in the context of sustainability and circular economy. There are also the global commitment of the Paris Agreement to be considered. According to COP26, 70% of the world's economy has committed to reaching net zero emissions. More than 80% of the countries have updated their NDCs, and all G7 countries have announced NDCs targets to achieve net zero emissions by 2050.
Our strategic objective is to become a critical partner to the world, enabling countries and citizens to achieve this commitment and reinvent a sustainable economy through extending our own footprint on positive impact. Clearly, virtual universes powered by the 3DEXPERIENCE platform are the tool not only for our clients, but for all stakeholders to enable to design, test, imagine radically new materials, products, manufacturing process for tomorrow's sustainable economy, to be able to do so at the fastest possible speed. While in addition, we experience the change and embed significantly into everything we do, we share with you last quarter the importance of science-based targeting initiatives, SBTi, approved our ambitious greenhouse gas emission targets, thus reducing our footprint. We need to walk the talk also for our own company.
At Dassault Systèmes, sustainability goes with innovation and is at the core of what we do with the 3DEXPERIENCE platform and industry solution. I think together we can make the difference with our clients from that standpoint. Now, Pascal, you have the floor to run the numbers.
Thank you, Bernard. Hi, everyone, and I hope you are doing well. Thank you for joining us today. Turning to our financial performance, we deliver strong third quarter results, thanks to a broad-based growth across the geo product lines and the industry. Let's start with the top line, the year-over-year comparisons. First, total revenue grew organically 12% to EUR 1.160 billion, near to the top of our 10%-13% range. Software grew 11%, driven by licenses and other revenue, which grew by 24% to EUR 208.3 million, well above the guidance. Subscription and support revenue increased 8%, driven by the high double digit subscription growth, reflecting strong Medidata and 3DEXPERIENCE sales. Recurring revenue represent today 80% of the total software revenue.
Services revenue was up 19%, driven by the large 3DEXPERIENCE projects, and we achieved a services gross margin of 20%, substantially better than last year. Thanks to the effort we made in 2020 to preserve the margin in the face of the pandemic and at the same time, you know, preserving also the deployment of our largest customers. From a profitability standpoint, we deliver significant outperformance in operating margin and earnings per share. This was driven by revenue at the high end of guidance, strong operational execution, and the continuation of the pandemic-related expense and headcount tailwind we discussed last quarter. Our operating margin expanded 560 basis points to 33.8% versus the midpoint of our guidance of 29.15%, an overperformance of 465 basis points.
EPS grew 40% in constant currency as reported to $0.22 compared to our guidance of 13%-19%. Headcount. This quarter, we saw a strong hiring activity up more than two times compared to Q1, resulting in a 2% overall headcount increase, driven by research and development up 4%. I think we have the track record recording of delivery, delivering transformation innovation and in the context of the mission-driven culture. While attrition remain elevated, we are confident in our ability to attract and retain top talent in the mid- to long-term, and this is a top priority for Q4, but also for the beginning of next year. Turning now to the software revenue by geography. The Americas grew 12% during the third quarter, benefiting from strong performance in life sciences and healthcare, but also aerospace and consumer packaged goods.
On a year-to-date basis, the Americas represent 38% of the total software revenue. Europe increased by 9%, led by Northern Europe and France. Germany rebounded during the quarter, specifically driven by the auto supply chain. On a year-over-year basis, Europe represents 36% of the revenue. Asia rose 13% with India and Japan rebounding during the quarter. China grew 8% on the back of a strong year-over-year comparisons. At year-to-date, Asia represents 26% of the revenue. Now let's zoom on the product line performance. Industrial Innovation software revenue rose 8% to EUR 555.3 million. SIMULIA and DELMIA performed extremely well, thanks in part to the large client wins we did recently, but also this quarter. CATIA license revenue was up double digits, while ENOVIA experienced a strong subscription growth.
In life sciences software, revenue totaled EUR 226.5 million, an increase of 19%. Medidata continued to experience strong momentum across its different product portfolio, including Medidata Rave, Medidata Acorn AI, and Medidata Patient Cloud, as well as across end markets, including the pharmaceutical and biotech company, the contract research organizations, but and also the medical device company, where we signed a new enterprise platform deal with one of the top 10 med device company. We also saw a high double-digit growth in the attach rate, and this is extremely important because it's a way to leverage the large installed base we have been able to build over time. In summary, the life sciences industry is transforming rapidly, adopting decentralized trials and AI-based analytics using Medidata unique data science capability, as it was shown and demonstrated and testimonial during the NEXT conference this month.
In mainstream innovation, software revenue growth 13% to EUR 262.9 million. It's a broad-based demand drove SOLIDWORKS software revenue growth of 12%. On the back, if you remember, on a relatively stronger comparisons as the recovery started in Q3 last year. We continue to see a good adoption of our 3DEXPERIENCE Works family cloud-based solutions during the quarter. Zooming on Centric PLM, they executed extremely well against this quarter, reaching the milestone of 500 clients, more than 2,000 brands. This is driving a high double-digit increase in software revenue. I should say close to triple-digit growth. Adding some color on industry, during this quarter, we saw a very positive and growth-based dynamic in the key industry.
The vast majority of our high-end markets grew double digits, including core manufacturing industries such as transportation and mobility, aerospace, defense and industrial equipment, just to highlight a few. Now, let's turn to our key growth strategy, 3DEXPERIENCE and Cloud, and how we are progressing relatively to the objective we lay out during our 2020 Capital Markets Day. Year to date, 3DEXPERIENCE software revenue grew 18% with license and other revenue up 38, to now account for 28% of the total software revenue, which is an increase of three points relative to last year. The strong value proposition of our 3DEXPERIENCE has been the key factors in driving the client wins.
Cloud, the year-to-date cloud software revenue is now representing 20% of the total software revenue, +1 point compared to last year, and increased by 24%. Driven by a continuous trend in life sciences, but also in 3DEXPERIENCE cloud. We are focused on supporting customers as they adopt the new business model, and they are coming to us in order to accelerate innovation cycles, speed up executions, and drive business transformation, all centered on improving value and experience for user and customer. Our strategy for the cloud is to enable this transformation through cloud-native applications, cloud extension to existing on-premise investment, and the 3DEXPERIENCE platform with an open ecosystem.
As Bernard pointed out, the Renault partnership and the momentum in the mainstream markets we see are clear proof point of our cloud strategy to enable this transformation of businesses and consumer in our core market. Turning now to cash flow and balance sheet items. The year-to-date cash flow from operation rose 24.5% relative to last year, to EUR 1.25 billion, which is almost the equivalent of what we did last year for the full year. Our net financial debt position on end of September decreased by EUR 850 million, and now it represents a debt net to EUR 1.2 billion. Putting us on a pace to reach our delivery goal well ahead of schedule, almost a year before.
Now, zooming in on our 2021 financial objectives, we are raising our fiscal year 2021 revenue growth objective range from EUR 4.745 billion-EUR 4.790 billion to EUR 4.800 billion-EUR 4.825 billion, representing an increase of 10%-11% in constant currency. We are also raising our EPS objective range from EUR 0.91 -0. 99 cents to EUR 0.94 -EUR 0.95 cents, or a growth of 25%-27%. We expect an operating margin range of 34%-34.1% versus 32.7%-33.1% previously.
We expect the expense and head count tailwind we are expecting this year to dissipate in the coming quarter, as we have stated, with the resumption of travel, increased sales and marketing spend and accelerate the net gain in hiring in the key areas across the globe. Our updated guidance captures incremental earnings upside from the third quarter and increased revenue visibility while expenses remain unchanged. You will find more details about our full year objectives as well as the fourth quarter guidance in our earnings press release and presentations. In conclusion, I think we are encouraged to see the vast majority of our end market growing in double digits this quarter, particularly on our core, manufacturing industries. It was also great to see certain countries like India, hard hit by the pandemic, you know, stage a comeback this quarter.
Two, the client imperatives of Virtual Twin Experience inclusiveness by way of platformizations and the cloud as well as sustainability are accelerating. We view this as secular driver for the next decade. Three, our strategy is really to enable this imperative and our 3DEXPERIENCE platform powering Virtual Twin Experience is a competitive advantage as it connects IDs, people and data on a common architecture and a common framework. Our commitment to drive, you know, clients, our strategy is real, and we thank them for their continued trust this quarter. Lastly, we hope to resume in-person meetings with the investment community in the coming months, and we look forward to seeing you very soon. I think Bernard and I would like now to take and answer your questions.
Thank you very much, ladies and gentlemen. If you wish to ask a question, please press star and one on your telephone keypad and wait for your name to be announced. If you wish to cancel your request at any time, please press the hash key. Once again, it is star and one to ask a question. Your first question comes from the line of Jay Vleeschhouwer from Griffin Securities. Please go ahead.
Thank you. Hello, Bernard, Pascal and François. Pascal, since you spoke about headcount and hiring, why don't we start with that subject? When we look at your jobs data, there's some interesting trends in terms of where you're setting priorities. At the product level, for example, there has been a significant increase, it would seem, in positions having to do with DELMIA, and perhaps you could talk about that. Also, it looks as though your sales openings are now well above where they were pre-pandemic. Not surprisingly, you have a lot of positions related to cloud. And then lastly, within Medidata, there seems to be substantially more momentum in terms of sales hiring than R&D hiring within Medidata. Perhaps you could talk about some of those internal priorities.
These would be hiring and then a few other questions.
Okay, Jay. As usual, you have scrutinized our website, but I will give some highlights because you are keeping good points. You are right. I mean, we see a lot of demand on the manufacturing side. As you may know, it's a domain expertise by itself, but it has to be crossed also with industry expertise. This is, you know, one of the competitive advantage we have, and especially in North America, where we are seeing a lot of momentum, and we have a lot of open positions in this domain. Related to the sales opening positions. Again, that's also true, especially in North America, but also in Asia. Why so? Because again, we are diversifying the domain, we are diversifying the industry we serve.
We are also, you know, I'm sure you noticed signing a larger contract. We need also to reinforce some of the existing sales teams we have. That's also the reason why, you know, we are opening significantly sales positions right now. Medidata. I think there are a few things we should say. First of all, Medidata invested a lot in research and development in the past. If you remember, before the acquisition, I mean, it was mainly an R&D machine, I should say. Now we are rebalancing. Why so?
Because on one hand, on research and development, we are leveraging the rest of Dassault Systèmes, especially, you know, the capacity we have in India, which is a tremendous advantage to complement the core development teams we have with Medidata in New York and also in London. Also because the goal for, you know, the sales team of Medidata right now is not anymore to promote only the Medidata solutions, but all the solution of Dassault Systèmes dedicated for life sciences. We need to reinforce to mix different type of profile to be probably more transformational and probably less transactional, which is a different setup. That's the reason why you have, you know, a significant request or offers to join the Medidata on the sales side. But good catch from Jay.
Okay, thank you. With regard to cloud, when we break down those percentages into revenue, there's also an interesting trend there where it looks as though, for the year to date, including the quarter, about half of your year-over-year increase in cloud revenue was from products other than Medidata. Medidata half, maybe slightly more than half, will be revenue increase in cloud, but then everything else. Maybe you could talk about those other components of non-Medidata cloud revenue growth. Secondarily, when we began the year, DS expected that 3DX would account for the majority of your new license revenue, as you define it.
You're about 36% year to date, so it would seem you're not necessarily going to hit that objective of the majority of your license revenue coming from 3DX. Perhaps you could talk about that and perhaps you would look at 2022 as perhaps the year in which it becomes the majority.
Let's start with the second part of the question. If Bernard wants to say a few words about the cloud, you're more than welcome. On the 3DEXPERIENCE platform, you miss one point, which is important. Jeff, our goal is to have the vast majority of the license coming from direct sales to be 3DEXPERIENCE-based. That's a different challenge for the indirect sales. Why so? Because you know that the vast majority of the SOLIDWORKS resellers are still promoting the SOLIDWORKS desktop solutions. You know, it takes time. Now we have the solutions. They have been enabled. We have changed also the incentive for them to be probably much more incentivized on 3DEXPERIENCE platform-related applications than only the traditional SOLIDWORKS desktop.
In countries like China, you know, when we hire a lot of new partners recently, we are already there. I mean, just China by itself, they sign more than 200 new customers this quarter on the cloud with the new generation of SOLIDWORKS being web-based. That's the first part of the answer. The second one is also related to the second indirect channels we have, you know, called Value Engagement. They are reselling the vast majority of the PLM solutions, and they are tackling specifically, you know, the supply chain of the auto and aerospace sector. For them, you still have programs running with V5. You still need to continue. They still need to have some additional V5 licenses. That's the reason why, you know, the balance is not 100%.
If I step back a little bit, and I look at what was the percentage of the mix before the pandemic, we were, the V5 was still representing 60%, and now it's the opposite. V5 represent less than 30% between 33%-34%, and the rest is 3DEXPERIENCE platform. I think we are really walking the talk, and we are sticking to the plan, which is exactly the one you just described. It's not 100% today. You are right. The cloud,
Okay.
Okay.
Oh, yes, please. Yes. Then.
You could come back if you have additional question related to 3DEXPERIENCE platform. The cloud, I think it's a very good point, which is half of the growth is coming from products solution, which is outside of the Medidata scope, which is a proof that, it's not the only one driving the growth. What are those product lines we are talking about? The first one is Centric PLM, which is heavily cloud-based. The vast majority of the customers like to have the cloud-based solutions. The second one is really all the new industries such as construction, consumer goods, consumer packaged goods are the one having almost no legacy solutions. They start day one with cloud solutions.
Third, you also have all the newcomers, you know, like, all the EV guys, all the guy developing the new flying objects. They are also starting day one with all the cloud solution we have. Last but not least, Renault is a good example. You know, Renault is really, we renew the contract with them for the next five years. At the end of the five years, 100% of the 3DEXPERIENCE users will be on the cloud. It's a lot of people. We are talking about more than 20,000 people. My point is, we are sticking to the plan. The plan is to have a third of the revenue in 2025 coming from the cloud solution.
I think we are right on the path to make it happen.
Okay. Lastly, if I may, on SOLIDWORKS. My calculation, looking at the results for the quarter, is that new SOLIDWORKS commercial licenses were about 17,000, up a few % year-over-year, but down from Q2.
You reported those 12% growth for SOLIDWORKS. I'm wondering if perhaps you saw either an ARPU increase for CAD seats and/or significant growth in other non-CAD parts of the business to get to that 12% total growth.
The ARPU is growing, and you know, it's mainly coming from the fact that we have different solutions. The vast majority of the customers are selecting the most complete configuration of the software. This is point number one. Point number two, I think related to the number of license, it's a little bit higher. It's a little bit more than the numbers you computed.
Okay. Very good. Thank you, everyone.
Thank you. Your next question comes from the line of Neil Steer of Redburn. Please go ahead and ask your question.
Hey, thank you very much. In fact, Jay just asked a couple of my questions, but just one other. Over the course of the last few quarters, when you've referenced recruitment and so forth, North America seems to come up quite a lot as an area where you would have liked to have done more, but you haven't been able, both on the sales side and on the technical side. I'm just wondering, is there some sort of a structural challenge that you're facing specifically within the North American market on recruitment?
No, no, I don't think so. Neil, there are few things you need to consider. You remember one thing, the vast majority of the people we have on the sales side in North America are coming from IBM's. Right? The rest is coming specifically from the acquisition we did a long time ago, the MatrixOne.
Right. Mm-hmm.
This is the core. Why I'm saying that? Because, you know, the guy coming from IBM are, for some of them, close to be retired. We are progressively replacing them by a different profile, either in term of generation but also in term of set of skills. Because we are diversifying also in new domain, and we want to have the full coverage. That's the reason why maybe you see more requests in North America than in the rest of the world. The second thing is, if you look at North America, the direct sales represent 50% of the revenue, which is not the case in the other geo. We are much more balanced between the different channels. Due to that, also you have...
We are oversized, if you want, the request for the sales people in this region of the world. Last but not least, we have some attrition. This is true, but I think it's not at a point where it's a real issue. I think the real issue maybe we have, we are probably taking too much time, you know, to hire people. That's a topic on which I'm working with Erik Swedberg, the GOMD of this region, because we need to accelerate and, you know, to be able to onboard the newcomers much more rapidly. Last but not least,
Thank you.
Neil, I think we did something great. We partner with university, and we have a program in place to hire fresh graduates coming from, you know, the university. We have developed for them a journey, whereby after two to three years, you know, they are becoming salespeople in some domain where it's difficult to find the skills. That's also another initiative we launch.
Okay. Thank you. A slightly unfair question, but one of your competitors or your largest competitor, it seems over last year or so, sort of made a great thing about their expansion and their growth in EDA, which they see as sort of the fastest growth area of the market. How do you sort of see that challenge yourself? Do you think you need to have more capabilities with EDA and be able to match the market growth opportunity that they're highlighting there?
I don't think so.
If
We are not a point solution. We are focusing on global platformization of the industry. Nils, there are few things. For the EDA market, we prefer to partner. There are multiple reasons for that. One is you look at the semiconductor industry, it's heavily concentrated, right? The value we bring is not the design tool, it's the IP management capabilities, which is really our core differentiations. I think if you look at the top 30 semiconductor companies, we are by far the leaders.
The other, the industries are considering EDA as a small piece of a more comprehensive issue, which is the system view of their installations. The system view for us is the priority. Being able to have a full holistic multi-scale system approach, and this is where we see the future of the core business for integration of electronics software on mechanical system, for example.
Whether you are in med tech or in smart new products, mobilities, whatever you name them, this is where the real challenge for our customers are. Therefore, the platform for system integration, configuration and life cycle management is significantly important to them. This is an arbitration we did. Make sure we focus on the right priorities for the clients.
That's great. Thanks very much.
Thank you. Your next question comes from the line of Jason Celino of KeyBanc Capital. Please go ahead.
Hello, thanks for taking my question. I think you mentioned a couple of large deal wins for DELMIA and ENOVIA this quarter and but my question is about general large deal activity. I'm curious, you know, how is it tracking in terms of sales cycles, pipelines? You know, is it improving, about the same? Then how do you feel about Q4 when we typically, you know, see more of these, you know, large deals, type deals? Thank you.
You make the good point, we see the return of the large deal in the pipeline, definitively, and Renault is a good example. We announced a GDR early this year. Clearly, we are seeing those large deals coming again. Now, for Q4, we have some. But I will say, you noticed that we have been able to deliver higher than the guidance, especially on the new license, almost every quarters in the beginning of the year. I think you are already seeing some part of it. However, for, I would say next year, we have an interesting one. We have clearly re-engage with many of our large customers and also new one on the, on the, on the longer horizons.
Before the pandemic, I mean, in the first six months of the pandemic, the view was almost only six months. People, they were looking for very tactical solutions, you know, having short return on investment. Now, the conversation is much more oriented towards the transformations. As Bernard said in his introduction, you know, the challenges related to sustainability, to the experience economy is such that they have to take decision and take radical decisions in terms of investments. In many of them, we are one of their top priorities. I would say the situation is improving compared to what used to be a year ago, definitively.
Okay. Excellent. No, that's quite helpful. Then maybe one more if I can. You know, when we think about this strong, you know, strong growth that we're seeing in Medidata, you know, could you characterize it as broader industry tailwinds versus share gains or wallet share gains? Thank you.
It's both, in fact. If you look at in terms of new customers, Medidata gained almost 20%, 22% more customers this year. We are close to 2,000. At the time of the acquisition, it was around 1,200. It's a significant. As you may know, the life sciences sector, especially the pharma sector, is relatively concentrated. That's point number one. Point number two, it's really, I mean, the growth is coming from the mid-market. 'Cause Medidata has a significant footprint already in the large enterprises. The mid-market was not properly covered. I think the fact that we are together with them has accelerated the diversification in the mid-market outside of North America. The second thing is the CRO.
As you know, the CROs is also a channel for Medidata. Especially in Asia, we are accelerating also through this channel. Q3 as being outstanding on this standpoint, the performance coming from the CRO is extremely high. That's for the, I would say, the coverage. Now, inside the install base, the attach rate for all the new module is significantly increasing as well. That's also the good news. Not only Rave, the core product, is growing extremely well, but all the module like CTMS, RTSM are extremely, I mean, having a extreme positive momentum. Last but not least, the two other new product line, if you want.
Medidata Patient Cloud and Medidata Acorn AI are expanding and growing extremely rapidly because they are unique on the market. If you look at all the competitor we have, none of them are the equivalent. If you do the combination of those factors, it's really a broad-based growth. We cannot say that only, I would say, Patient Cloud is growing. It's really across all the different axes and of the strategy.
Great. Thank you, Pascal.
You're welcome, Jason.
Thank you. Your next question comes from the line of Stefan Slowinski of Exane BNP Paribas. Please go ahead,
Yeah. Great. Thanks for taking my questions. Pascal, just one quick one for you. You mentioned this morning about the maintenance revenue growth rates kind of re-accelerating in Q4. I just wanted to double check that kind of recurring revenue component, ex Medidata, which has slowed this year. I think we talked before about that re-accelerating next year back to around 8%. Just wanted to see if that was still on the cards and in line with that discussion around the maintenance rates re-accelerating to sort of 4%-5%. That's the first question. The second question may be for Bernard.
Just following up on the comments around platform and supply chain, and you highlighted the Renault relationship, and I think they're also testing or using a new Google supply chain digital twin tool. Just wondering if that's something that you're integrating with, and also how you're working with or integrating with other supply chain solutions, IoT platforms, or analytics platforms. Maybe anything along the line of partnerships with other software vendors or technology vendors that are helping you deliver these new supply chain future solutions to your customers would be really interesting. Thank you.
Thank you, Bernard.
Okay. The recurring revenue is representing 80% of the total software. You remember, you have two components. You have the subscriptions and the maintenance and support. The subscription represent a little bit more than a third now. As I was telling you, it grew at 20% in Q3, and there is no reasons the trend will not continue for full, right. The maintenance and support represent a little bit less than two third. I was mentioning, we reached the lowest point, which is 3%, because the growth is coming specifically from the new license you sold almost a year before.
Just because we started to see the new license growth back in Q4 last year, this will re-accelerate it in line with what I just described this morning, which is around 4%-5% rapidly, I would say. Depending on the mix next year, the maintenance could accelerate definitively, yeah. Just because we see more and more subscriptions coming from the non-Medidata products, I should say, specifically ENOVIA and also the 3DEXPERIENCE platform, I think what matters for me now, it's really the growth for the recurring revenue, because at the end, this is what it's about. As you know, I committed to deliver 9% organic growth. That's what is in the plan for the long-term plan.
I will not be able to achieve this organic growth if at the end, I'm not delivering at least 8% growth for the recurring part, right. If you do the math, you will see, you will find your way.
Related to supply chain, of course, first of all, I think there is a big move to, for all industries to reevaluate their supply chain. Who is doing what for which value? I think the supply chain is going to move to a value chain, ultimately. We have, in the case that you mentioned in your question about Renault, the full scope of product cost, value, supply chain integration, data science, and data analytics to improve it. But there are many things. There are, you know, the basic data collection needs to be done. You mentioned IoT.
In the case of MOM, Manufacturing Operations Management, Manufacturing Execution System, we do. You have the basic system in the shop floor that do data collection, and then we collect those data and put them in context of the Virtual Twin of operation of the manufacturing plant. This is where the value is because this is how you can transform and improve your processes or your flow across the world. Really it's a core aspect of what we do with the platform. This is what I call experience as a service, by the way. To your question about do we connect with all the web services, absolutely yes.
In fact, it facilitates the speed at which we can exploit and provide the value to customer from that standpoint. Everyone should keep in mind that when you have the Virtual Twin of the product on the processes, on the life cycle of it, at the end, the convergence is on our platform, not anywhere else. You can do a nice data lake, but if you don't know to what you should compare your data, you cannot conclude on how we trade. That's the value. That's the difference between basically digitalization and virtualization. That's exactly what we do with Renault and many others.
Okay. Thank you both.
Thank you. Your next question comes from the line of Johannes Schaller of Deutsche Bank. Please go ahead.
Which will be our last question.
Thank you very much, sir.
Thanks.
Sorry.
Sorry, yeah.
Enough.
Thank you very much for letting me on.
Yeah, congratulations on the good quarter.
Thank you.
Pascal, I wanted to come back to a comment from the last conference call. I think when you said maybe the right range to think about margins for next year is kind of around 32%, maybe 31.5. It sounds to me like some of your hiring efforts are accelerating and maybe becoming a bit more expensive. I think you mentioned salary increases, for example, in markets like India on the call this morning. In that kind of framework, does that margin number still make sense to you or is your OpEx maybe increasing a bit more into next year?
Also, given your cloud business seems to accelerate quite a lot, and the dynamics you discussed around maintenance, how should we think about mix having an impact on the margin as we go into next year? Thank you.
Okay. Let's start with the second part of the question, the cloud. You know, the... For us, the margin is equivalent, whether it's a cloud or on premise.
Mm-hmm. That's important.
That's very important for you to understand because there is no dilution of the margin the more we are selling to the cloud. You know the reason is because we have our own infrastructure, and we control the efficiency of this infrastructure. The margin is for us. It's not for the provider, I should say. That's point number one. Point number two, what I said last time, you should count that one to 1.5 will be the order of magnitude of the decrease of the operating margin. Today, the full year will be at 34% midpoint. You know, targeting 32.5% seems reasonable. The reason is there are a few things.
One of them is the one you just described, but that's not the only one. It's also the fact that we want to have the people back on the road. We want, again, to re-energize the marketing, and especially the physical events. That does not mean everything will be physical. We will continue to do the digital things. Reconnecting with customers, with partners is becoming very important. I do not want to miss the opportunity and the window to make it happen. So that's the reason why, you know, I think it's in our best interest if we want to continue to fuel the growth to deteriorate a little bit the operating margin next year because we need it.
That's clear. Thank you very much.
You're welcome. Thank you very much for participating to this call. I noticed that many of you could even attend this morning call, where we had a very rich, broad set of questions, too. You know the record will be available, so you can take best advantage of it. Of course, we continue to stay close to you to address any of your concerns and also receive good ideas from your side to do better. With that, thank you very much, and talk to you in February at least. Have a good day.
Thank you, ladies and gentlemen. That does conclude your conference for today. Thank you for participating, and you may now disconnect.